KARACHI: The government should take steps to expedite its planned trade with Afghanistan to be conducted in local currency to increase bilateral trade, a business leader said on Tuesday.
“The State Bank of Pakistan has not issued a notification to facilitate trade in rupee despite the announcement by finance minister, causing the bilateral trade to suffer,” Muhammad Zubair Motiwala, chairman Pakistan-Afghanistan Joint Chamber of Commerce and Industry (PAJCCI), said at the 3rd Stakeholders Meeting held in Karachi.
Motiwala said trade with Afghanistan has declined by 50 percent and "if appropriate measures are not taken instantly then it may further deteriorate". "The current situation in Afghanistan has brought immense business opportunities for Pakistan and if the trade in rupee would be allowed, it will not only strengthen the rupee value but would also help reduce our current trade deficit drastically," he added.
Afghanistan has been facing an acute shortage of US dollars since the Taliban takeover, creating fears of an economic collapse leading to another humanitarian crisis and refugee influx in the region.
Motiwala told the forum that Afghan businessmen are willing to use the Pakistani currency as a temporary arrangement since they are aware of the depleting dollar reserves of their country.
“It is time we move forward to increase our export footprint in Afghanistan and make it our second largest export destination," he added. "With a relatively more friendly government in Afghanistan, the trade can easily be enhanced to $10 billion in the long run and $5 billion within the next couple of years.”
The highest export volume from Pakistan to Afghanistan was recorded at $2.7 billion in 2010-11, after which it has seen drastic gravity, mainly attributed to aggressive penetration by Indian exporters by leveraging their government’s favorable relations with the previous administrations in Kabul.
India’s significant investment created major roadblocks for Pakistani businessmen, however, due to the stagnant banking system prevailing in Afghanistan at the moment, if the government will facilitate rupee trade, then the trade quantum can move up to $2 billion in a couple of months with an incremental graph.
Motiwala said Afghanistan has potential investors who desire to invest in Pakistan, "but due to the prevailing policies and structure, it seems unfeasible". It should be immediately looked into to encourage regional investments, he added.
Chairman PAJCCI urged the Prime Minister and finance minister to pave ways for bonding economic ties at the diplomatic levels as soon as possible for reaping significant economic benefits that would have a positive impact across the region.
"The sanctity of Pakistan and Afghanistan is of prior concern and PAJCCI stands by all relevant measures that are required to be taken, however proactive economic measures will aid in enhancing the business spectrum for both countries."
Jawed Bilwani, president PAJCCI, said a shortage of containers is causing a huge hurdle in the current momentum of trade with Afghanistan. Currently, around 350 containers are in transit and delays caused by procedural hindrances is aggravating the situation. He further sought GoP to ensure providing secure land routes to trade not only with Afghanistan, but also to reach countries like CIS and Iran.
Junaid Makda, director PAJCCI, emphasised that finalisation of APTTA agreement and the facilitation in accessing CIS countries is of critical importance at this time.
The Afghanistan – Pakistan Transit Trade Agreement (APTTA) was signed in 1965 with the objective of granting and guaranteeing to both parties the freedom of transit to and from their territories .
Makda, further added that the secure and reliable land transit through Afghanistan is essential for Pakistan’s business growth.
He urged the government to define a framework for safeguarding business interests across the region proactively.